Agile Banking

Great local currency related design project. My favorite are the Little Italy Favors.

Kiva is one of those companies that has really captured the imagination of people here in the US. I have always been critical about it, in particular the lack of interest payments to lenders.

I believe it is not sustainable in the long run without interest payments to promote good business practices. Secondly I think too many of the Partners don't pass the smell test on being serious about microfinance.

So now we find out that the Kiva model has been essentially a fiction.

Kiva, a nonprofit organization, promoted itself as a link between small individual lenders and small individual borrowers like Maryjane Cruz in the Philippines, who recently sought a $625 loan to support her family’s farm.

But Mr. Roodman’s blog post said that lenders like Mr. Kristof were not making direct loans. Borrowers like Ms. Cruz already have loans from microfinance institutions by the time their pictures are posted on Kiva’s Web site.

Thus, the direct person-to-person connection Kiva offered was in fact an illusion. Kiva’s lenders were actually backstopping microfinance institutions, and since Kiva and other online giving and lending models pride themselves on their transparency, Mr. Roodman and others suggested it might better explain what its lenders’ money — about $100 million over four years — was really doing.

For something like KIVA to work and not be just another charity, it has to make it real. It has to be a real Person 2 Person lending site and not a person 2 NGO lending site. It has to be 100% transparent about everything. The way this works I don't know if you can trust repayment rates at all.

So companies make bad decisions. Charities also often decide to err on the side of a good story as opposed to the truth. However this could set back the success of real p2p micro lending sites several years and that is what I find most sad.

Tom has made a great screencast showing CapCard running ontop of OsCurrency.

@dgwbirch interviews @eisokant about Twollars - "The currency of Appreciation".

Banks are serious business. They need serious databases to store serious transactions and serious account information. They can’t lose any money. Ever. They can also not create money. A bank must be in balance. All the time.

Comment on topic or styleConventional wisdom says a database needs to support transactions to be taken seriously. CouchDB does not support transactions in the traditional sense (although it works transactional), so you could conclude CouchDB is not well suited to store bank data. Besides, would you trust your money to a couch? Well, we would. This chapter explains why.

While investment banks readily have accepted all sorts of interesting new databases, modern databases are still not very common in retail banking applications.

CouchDB is one of the new generation of NoSQL databases. It is particularly interesting to financial applications because of it's core MVCC architecture.